Qatar Holdings to Pump US$ 250 mn in Arthveda's Affordable Housing Fund

In a significant foreign investment in the affordable housing sector, Arthveda Fund Management Pvt. Ltd has said that Qatar Holding Llc has committed to invest $250 million in its affordable housing fund.

Bikram Sen, chief executive of Arthveda Fund, said that the subscription of the entire corpus of its foreign direct investment-compliant affordable housing fund by Qatar Holdings is the first significant foreign inward investment into India’s affordable housing segment after the recent Union budget.

The Union Budget on 1 February gave a big push to affordable housing projects and announced many incentives to realize the government’s housing-for-all initiative.

India needs to build 19 million urban housing units in the low- and mid-income category by 2022 across tier I, II and III cities which require a capital of $1 trillion, according to estimates by Arthveda.

Arthveda is an associate firm of Dewan Housing Finance Corp. Ltd (DHFL).

“Arthveda’s affordable housing fund leverages our entire group’s leadership in the low and mid-income lending segment and applies that to investments in affordable housing,” said Kapil Wadhawan, chairman and managing director of DHFL and Arthveda.

Apart from the affordable housing fund, which is Arthveda’s first offshore fund raising, the firm has raised domestic real estate funds earlier.

According to Arthveda, affordable housing is the main focus area in the country’s growth agenda and will trigger more foreign investments into this sector. The positive FDI policy changes that happened in this segment will also continue to give a boost to inward investments. 

The government of India has gradually removed minimum project and investment ticket size restrictions in this segment, which should significantly catalyze development and investment, Arthveda said in a statement.

Union Budget 2016: Realtors Expect More But Happy To See Few Positives

When the Finance Minister presented his third budget speech in the Parliament, the housing sector was waiting with bated breath expecting the much-needed impetus to the sagging Indian real estate sector which has been in doldrums for the last few years.

Although there are no big-ticket announcements to cheer up developers and home buyers, realtors feel that Arun Jaitley has given some room for the sector to find its growth momentum when he made his point to promote agriculture, infrastructure and rural sectors while giving a push to affordable housing.  

Realtors and their associations though welcomed the budget proposals vis-à-vis real estate sector, they are cautious and refused to be overwhelmed.  Excerpts…

Budget Promotes Affordable Housing - Praveen Jain, President, NAREDCO

While referring the Budget as ‘growth-oriented,’ the National Real Estate Development Council (NAREDCO) has highlighted the impetus given to agriculture, rural sector development and infrastructure besides offering incentive to affordable housing by allowing 100 per cent deduction for profits from housing projects (upto 30 sq. mtr in metros and 60 sq. mtr in other cities). Praveen Jain, President, NAREDCO said, Rs 50,000 additional deduction of interest on home loan for first time home buyers, exemption of Service Tax on Construction of affordable houses and disallowing DDT for Real Estate Investment Trusts (REITs) are expected to stimulate the housing activity.

Rural Focus will Generate Domestic Demand: Dr. Mahesh Gupta, President PHDCCI

While applauding the Union Budget 2016-17 announcements, President, PHD Chamber, Dr. Mahesh Gupta said that the focus on rural India would go a long way to generate demand in the economy and give a push to overall growth and development of the country. 

He expressed happiness over the government’s proposal to increase the tax exemption limit on Home Loans interest for the first time home buyers for housing loans up to Rs. 35 lakh will give a boost to the real estate sector.

Dr. Gupta said, stimulus to real estate sector would provide a significant fillip to the economy and enhance India’s GDP.

Budget is Well-balanced to Face Adverse Global Pressure: Kapil Wadhawan, CMD, DHFL

This year’s union budget has been encouraging for the housing sector and the overall economy. The proposal to introduce 100% deduction to undertakings for construction of affordable housing will help us in realizing honorable PM’s “Housing for all by 2022” scheme.
                         
The proposal to introduce guidelines for renegotiation of PPP contracts and reform dispute redressal mechanism will encourage private participation in the development of affordable housing projects and road infrastructure.

Decision to exempt REITS from DDT is also a welcome move. This will ensure positive movement on real estate projects and will help in bringing the sector on a sustained growth path.

DHFL had recommended empowering the customer for greater affordability. In this context, the decision to give additional exemption of Rs 50,000 for housing loan upto Rs 35 lakh sanctioned in 2016-17 for 1^st time home buyer provided the cost of a house is not above Rs 50 lakh is praiseworthy and will definitely ensure that more Indians will fulfill their dream of owning a home.

DHFL welcomes government’s commitment to boost road infrastructure and address rural distress by skill development of rural population, allocating funds for MGNREGA scheme and providing support to agriculture. We are of the view that this year’s budget will enable the Indian economy to withstand adverse global pressure and move on the road to a more balanced, sustainable and inclusive growth. We will remain an attractive destination for investment over the medium and long term.
 

Below Expectations But With Some Positives, Anuj Puri, Chairman & Country Head, JLL India

To give him due credit, the Finance Minister has definitely made a concerted attempt to manage expectations with a balanced budget. While three of the real estate sector’s major expectations – increased HRA deduction, removal of DDT from REITs and boost to affordable housing by allowing 100% deduction on profits made by entities constructing them – have been addressed, the Budget offered no financial protection from project delays to home buyers.

Most first-time home buyers in the major metros will be left out of the additional Rs. 50,000 tax exemption announced today, as it is applicable only on houses worth up to Rs. 50 lakh with loans of up to Rs. 35 lakh for houses. This announcement will mostly benefit first-time home buyers in tier-III and tier-II cities. The infrastructure sector was a major beneficiary today.

The biggest announcement with implications for the real estate sector in India was removal of DDT from real estate investment trusts (REITs).

Budget Could have Done a Lot More for Real Estate Sector: Kishor Pate, CMD - Amit Enterprises Housing Ltd.

This Budget could have done a lot more for the real estate sector. However, there were some positives. The fact that the annual housing rent reduction limit has been increased from Rs. 24000 to Rs. 60000 could lead to an almost immediate uplift for rental housing across the major cities. This can also potentially encourage the sentiment for home ownership in the long run.

Also, first-time home buyers have been given the benefit of an additional deduction of Rs. 50000 on home loan interest for loans not exceeding Rs. 35 lakh, where the value of the house is no more than Rs. 50 lakh. This will result in improved home buying sentiment in smaller cities with lower housing costs, such as Pune. An improvement in sentiment will also be seen in the cheaper far suburbs of the metros.

However, this deduction is not sufficient to increase the sentiment much for first-time home buyers in the central parts of the metros like Mumbai, where housing prices are exceedingly high and such an exemption makes little to no difference in the burden on home buyers. 

The fact that the market indices took a nosedive immediately after the budget announcement more or less reflects the way sentiment in the housing sector has gone. However, if the RBI announces a cut in interest rates on the heels of the reduced fiscal deficit announced by the Finance Minister, it could be a day saver.

Not Enough to Infuse vibrancy in Realty Sector: Arvind Jain, Managing Director - Pride Group

Budget 2016-17 was far below expectations. Some leeway has been given to first-time home loan borrowers, but the relief will not boost demand in the metros. That said, service tax has been exempted for developers who are focused on constructing affordable housing with unit sizes not exceeding 30 square meters in the larger cities and 60 square meters in the smaller cities. This is a significant plus, and in line with the incumbent Government's intention to boost affordable housing.

Allocation to MNREGA and irrigation activities have been stepped up, so it is logical to expect rural income to rise from this year onward. This can positively affect rural consumption story and boost the growth of smaller towns. Encouragingly, Rs. 1500 crore has been allocated for the moderation of land records in the Digital India campaign, which will definitely have a positive impact on transparency in the real estate sector.

On the retail front, permitting seven days of operation for small and medium-sized shops in the unorganized retail segment will allow them to compete more effectively with malls. This will boost the demand for retail stores on high streets significantly.

The plans to revive inoperational civil airports in partnership with their States with a rather small allocation of Rs. 100-150 crore per airport can have positive implications for the real estate development in these cities. It will boost infrastructure, and airports are also know influencers of demand for all categories for real estate.

Budget Gives Grand focus on rural economy, infrastructure development: ASSOCHAM

Huge focus on rural economy with a commitment to double the farmers’ income by 2022, betting quite high on rail and road infrastructure and yet sticking to the financial discipline by retaining the fiscal deficit targets for 2016-17 are the most important takeaways from the Union Budget 2016-17, ASSOCHAM President Sunil Kanoria commented.

“A huge commitment of Rs 2.18 lakh crore on the rail and road infrastructure will not only kick start the economic growth but would also result in having a multiplier effect on India’s economy,” said Kanoria.

DHFL Launches National Influencer Outreach Program

Dewan Housing Finance Corporation Limited (DHFL), India's second largest housing finance company in the private sector, has recently launched a national influencer outreach program in a bid to reach out to the tech-savvy younger generation in the age group of 18-25 years. 

This segment turns out to be the main influencer group for the prospective home loan customers in the lower and middle income (LMI) segment. The Company has launched two infomercials as part of the initiative to educate customers on the intricacies of home loans and would be launching a new video every month to update the customer on various home loan queries. This video will not only educate the customer on easy accessibility to home loans but also will imbibe confidence within them for buying their dream home.

The infomercials launched by the Company plan to convey the message to the younger generation that it is very simple to avail a home loan besides also educating them on the processes involved for applying for a home loan. The duration of each infomercial is close to three minutes and will be showcased across all digital mediums. The Company will also conduct workshops through its large network in the tier II and tier III locations. The video plans to reach out to over 5 lakh viewers through various social networking platforms.

The need for an educational approach arose because of the myths surrounding home loans and the indecisiveness on part of customers when it comes to applying for a home loan. The insights for the infomercials have been drawn from the expertise that DHFL enjoys for over three decades of servicing the low and middle income customer in the tier II and III towns and also through surveys conducted by the Company.

The video will further help increase awareness amongst the online searches on home loans, which stands at four and half lakh people seeking home loan information every month.

Speaking on the initiative, Harshil Mehta, CEO, DHFL, said, "The launch of our national influencer outreach initiative is a strategic move towards imparting knowledge to prospective home buyers, and complements the larger objective of the Indian government of achieving housing for all by 2022."

"The educative series is a step towards educating the target segment about the various benefits of a home loan and how the entire process can be made simple and convenient, thereby enabling them to take a well informed decision for buying their dream home," he added.

This influencer outreach program will further complement the recently launched "Bahanas" ad campaign by the Company to address the myths surrounding home loans. The infomercial will be showcased across branch networks and various digital platforms that are specifically targeted towards the LMI customers or the younger generation of LMI customers. It will be promoted on YouTube, Google+, news websites, Flickr, Pinterest, SlideShare, entertainment websites and high traffic online portals for maximum impact and reach.

DHFL Cuts Home Loan Rates

DHFL, one of India’s leading housing finance companies, today announced a reduction in its Retail Prime lending rate by 20 bps. DHFL has also reduced rates for its new customers and the rate will now start from 9.65%.

 Additionally DHFL has also announced a festive season offer whereby it will be providing a promotional rate of 9.55% (further 10 bps reduction from its new rate) to its new customers for loans upto Rs. 25 lakhs. This offer is valid upto December 31, 2015.

The company largely caters to the low and middle income segment in the Tier II, Tier III towns, with an average loan ticket size of below Rs. 15 lakhs. The Low and Middle income segment customers, which comprises majority of the total home loan book size, would stand to benefit the most, with the fresh rate cut and the festive season offer.

Commenting on the interest rate,  Kapil Wadhawan, Chairman and Managing Director, DHFL said, ” Over the last three decades, DHFL has been committed towards ensuring affordable housing finance to the Low and Middle income consumers. We believe that owning a home especially in this season is a deep desire within our customer segment. Our festive season offer reflects our commitment towards enabling home ownership in tier 2 and 3 towns for each and every Indian especially in the LMI segment.”

 DHFL has emerged as a one-stop-shop for its customers’ financial needs, extending beyond home loans. The company offers a range of home loan products including home loan, home extension loan, home improvement loan, plot loans, mortgage loan, SME Loan and non-residential property loan to all customer segments across India, retaining its concerted focus on the low and middle income segment.

DHFL also offers an array of Fixed Deposit Products for public including individual and trust investors that ensure high yield, safety and liquidity. DHFL Fixed Deposit Products for individual investors also offer an accidental insurance cover of Rs. 1 Lakh free of cost to customers. DHFL Fixed Deposit Products are rated CARE AAA and BWR (FAAA) ensuring high safety. Further, DHFL offers value-added and customized insurance solutions, along with its home loan products. Additionally, DHFL also offers project loans essentially for development of low and middle income housing projects.

 The company registered strong performance in the 1st quarter of the fiscal year – the loan book portfolio increased by 26% to Rs. 538 Bn as against Rs. 428 Bn for the corresponding quarter in the previous year. Priority sector lending to the low and middle-income segments in Tier-II and Tier-III cities has been the major growth driver for DHFL. As of June 30, 2015, DHFL’s Assets Under Management stood at Rs. 600 Bn.

DHFL launches Express Home Loan

DHFL, one of India's leading housing finance company , has announced an 'Express Loan' scheme to enable customers buy their dream home during the auspicious festive period, starting October 5, 2013. 

Under this scheme, salaried customers will be entitled to avail 'sanction' of the loan amount within three working days of submission of mandatory credit documents as per the customer profile and eligibility norms of the Company whereas for self-employed customers, the in-principle sanction will take four to five working days. 

The 'DHFL Express Loan' scheme can be availed from any of the DHFL branch office across the 456 locations in India. Rakesh Makkar, EVP & Chief Distribution Officer of DHFL stated, "DHFL Express Loan is a reflection of our endeavour to fulfill the dream of home ownership of customers during the auspicious festive season."

DHFL Express Loan offers customers an 'in-principle approval' for a home loan and is available for all potential customers who wish to avail a home loan for buying a ready or under-construction property or for refurbishment of one's house. DHFL also offers 'Plot-cum-Construction loan' for self-construction of one's house.

"Past home buying trend analysis shows a distinct boost during these months, which celebrate some of the biggest festivals in the country- Navratri, Dassera & Diwali. It is our endeavour to bridge the financial gap customers' face, and support their home buying decision," added Makkar.

To avail the DHFL Express Loans, customers need to submit relevant credit-related documents which include PAN/ TAN card, address proof, bank statements and tax returns. Disbursement of the sanctioned loan amount is subject to the legal & technical clearance of the property in subject as per the DHFL policy.

DHFL is India's second largest housing finance company in the private sector and has been enabling home ownership amongst the Lower and Middle Income segment in the semi urban and rural areas of the country for the last 30 years. The Company, has to its credit various innovations towards enabling home ownership and protection plans like 'Home loans for self-employed' and a 'Triple benefit insurance plan', to name a few.

DHFL was founded in 1984 by Late Shri Rajesh Kumar Wadhawan with a vision to provide financial access to the lower and middle income segment of the society. Led by Mr. Kapil Wadhawan, CMD, DHFL, the Company is reckoned as one of India's leading housing finance companies in India with a network across 447 locations.

The Company's representative offices in Dubai and London cater to Non-Resident Indians (NRIs) in their requirement for housing finance for purchase of residential properties in India.